ALBANY – Gov. Paterson is running away from his $50 million tax on hedge fund managers, a day after his Connecticut counterpart lauded the levy as a boon to the Nutmeg State.

The New York executive trashed the tax on out-of-state fund executives as a potential job-killer and blamed “special interests” for its inclusion in a legislative budget plan unveiled last weekend.

“We were not favorable to this,” he insisted during an interview on WOR 710AM this morning. “We did it because we couldn’t get the Legislature to do the other revenue raisers that we thought were far more constructive.”

The tax – endorsed by Paterson last week after negotiations with the Legislature – could soon be voted into law as part of a $1 billion “revenue” bill.

Now, Paterson says he agrees with critics that the action could spur fund managers to simply relocate offices to low-tax locales, like Greenwich, Conn.

Connecticut Gov. Jodi Rell, a Republican, sent a letter to the New York Hedge Fund Roundtable yesterday proclaiming “Connecticut welcomes you!”

“What Gov. Rell said is right,” Paterson said. “She’s trying to take advantage of it. That is why that is worth revisiting.”